Grey market premium (GMP)
GMP is the extra amount, per share, that buyers in an unofficial over-the-counter market are willing to pay for IPO shares before they list on the exchange. If an IPO has a cap price of ₹655 and a GMP of ₹208, the grey market is pricing the share at roughly ₹863 on listing day.
It is a sentiment gauge, not a price. No exchange clears these trades, no regulator supervises them, and the quote can move several times in a single day — especially in the last 48 hours before listing.
Kostak rate
Kostak is a flat amount someone pays you to buy your entire IPO application off you, before allotment is known. You get that amount whether or not you receive shares — the buyer takes the whole risk.
A Kostak of ₹1,450 means you are paid ₹1,450 for your application and walk away. It is quoted per application, not per share.
Subject to Sohna
A conditional version of Kostak: you are paid the agreed amount only if your application actually receives an allotment. If you get nothing, the deal is void and no money changes hands.
Because the buyer only pays on a confirmed allotment, Subject to Sohna rates are much higher than Kostak rates for the same issue.
Expected listing price
Cap price + current GMP. That is the whole formula, and every site quoting an 'expected listing' is doing exactly this arithmetic.
Treat it as the grey market's current guess, which is revised continuously and is frequently wrong when overall market sentiment turns between the close date and listing day.
How accurate is GMP?
Directionally useful, numerically unreliable. GMP usually gets the sign right on strongly subscribed issues — a large premium rarely precedes a deep discount listing — but the magnitude routinely misses by 10 to 20 percentage points.
It is weakest exactly where it matters most: thinly traded SME issues, and any issue where the broader index moves sharply in the days between close and listing.
GMP is unofficial. Grey market premium is an unregulated, over-the-counter indication with no backing from SEBI, BSE or NSE. It is not a listing-price guarantee and not investment advice. Read the RHP and consult a SEBI-registered adviser before applying.